It Helps to `Be Rich Silently' in Polarized China

Although the government is pleased that private companies like Gome are creating jobs and paying taxes, it faces increasing pressure to narrow the wealth gap. Many people would like to see Beijing take from the rich and give to the poor. The wealthy are often portrayed in the media as tax evaders and crooks who work with party bosses to seize land and strip the assets of state-owned companies.

Shanghai developer Zhou Zhengyi, a onetime noodle and underwear street vendor who used his political connections to become one of China's richest men, is cited as a prime example. The flamboyant 43-year-old is serving three years in prison for falsifying documents and manipulating stock.

Beijing recently imposed hefty taxes on yachts, expensive watches and big cars. Party leaders are also considering imposing higher personal income taxes on the rich.

Cities such as Beijing and Shanghai, wanting to protect small businesses, have recently placed restrictions on where big-box retailers can open stores. Although the policy will limit Huang's rivals, foreign chains such as Best Buy have more resources than Gome.

Lu, the State Council official, argues that Beijing, while preoccupied with the wealth gap, should also pay more attention to private domestic businesses like Gome.

"What really matters is that we should nurture our retail giants to fight with overseas wolves," Lu said. "Many of the state-owned companies are weak, but these private enterprises are wolves themselves."

Huang said he, too, was concerned about the great wealth divide in his country. But he said he was helping to bridge the gap, not widen it. Huang said he planned to hire an additional 20,000 workers this year.

After 20 years of making his own breaks, Huang said he was not looking for any special favors from the government. But, he said, "I just hope we can at least enjoy equal treatment."

Cao Jun in The Times' Shanghai Bureau contributed to this report.\o7

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The Middle Kingdom's top 10

*--* Company Industry Wealth (in billions) 1. Huang Gome Electrical Household appliance, $1.70 Guangyu Appliances/ Eagle Investments property 2. Yan Jiehe China Pacific construction 1.50 Construction Civil 3. Chen Shanda Networking Online games and 1.45 Tianqiao Development Internet portal 4. Ding Lei NetEase.com Online games and 1.25 Internet portal 5. Xu Rongmao Shi Mao Property 1.20 6. Rong Citic Pacific Aviation, civil 1.10 Zhijian infrastructure, property and telecom 7. Lu WanXiang Auto parts and finance 1.00 Guanqiu & Family 8. Zong Wahaha Soft drinks and 0.80 Qinghou children's clothes 8. Zhu Mengyi Hopson Development Property 0.80 & Zhujiang Investment 9. Chen Pioneer Metals Iron ore trade, iron 0.77 Ningning Holdings and steel & Lu Hui and investments

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Source: Hurun Report